tv Fast Money Halftime Report CNBC December 6, 2012 12:00pm-1:00pm EST
tonight tim cook of apple says television is an area of intense interest, brings us to the question, what's apple going to do to revolutionize tv? "make it a big iphone" brett writes make a tv in which the sound does not go up for commercials and i'll be the first is a-to-say google will copy apple if they are successful, samit bhatt. now we have scott wapner and "fast money." welcome to "the halftime show." four hours to go until the close. green arrows across the board. 13,041 the dow jones industrial average, all of the major averages in the green. here's what we're following on "halftime" target practice with its prediction for 2012 now within reach, jpmorgan's tom lee on the market's next move. net gain, netflix shares up again as the company rides the halo of its disney deal.
where is the next stop? one stock, two opinions in a halftime debate. first our top story the sudden sell-off in shares of apple, after posting its worst trading day in four years, the stock is rebounding but has still lost more than $35 billion in market cap over the past few days. jon fortt is in silicon valley with the latest, the worst performance of three days since 2008. what is the buzz in the valley? >> we've heard multiple theories why the stock has been falling, people selling ahead of the fiscal cliff, fearing capital gains, tax hike, fear that china mobile will take longer to start selling the iphone given it's already picked up nokia's latest lumia. reports apple is asking for fewer iphone 5 parts from suppliers and people wrapping that in with fears apple is losing phone market share to android and dealing with compressed margins from ipad mini and other products.
as a reporter covering the company i wonder if some of us have crossed over to irrational despondency on apple. tim cook set a high bar in revenue for the quarter, he just had a big opportunity to drop a hint in interviews with nbc's brian williams and bloomberg "business week." so far it seems he didn't do that. iphone 5 supplies coming into balance available to ship in two to four business days online. ipad mini demand outstripped supply which could mean margins are better than apple projected. there are open questions on the pro and con side of apple but the most important ones, these questions can apple ramp iphone supply ahead of the quarter and will depend be there for the smaller ipads in the face of competition from amazon and google? seems like those are going apple's way, scott. >> all right, john, can't overstate the sell-off, it's been surprising to many, traders have been surprised.
joe terranova you made a deft move and told us you sold 25% of the position that you took on the day you called apple a generational buy. >> and a lot of the reasoning behind shaving the position had nothing to do with the fundamentals of apple. it had more to do with the frustrations of i think the market is feeling with the fiscal cliff. it is a proxy for the market. i said to stephanie before i thought jim cramer made a compelling argument and explanation on exactly what is going on with apple. i don't think it has anything to do with the fundamentals of apple. it is an economic issue, between financial advisers, accountants. >> you think this is end of year selling, nothing more than that? >> i do. i really do. >> you called it the last time it fell. >> yes. >> somewhat precipitously, you bought it calling it a generational buy. are you buying apple on these pullbacks, had the worst three-day performance since 2008. >> and the one thing and i know you respect this about all of us
here, we look at this with the optics of being money managers and traders. i cannot allow ego come in to answer your question. it would be very easy for me to say absolutely, scott, i'm defending that generational low. what i see in front of me right now motivates me to do nothing, hold the position of waiting to see what's going to happen here with earnings. there is further downside potential through the end of the year and i acknowledge that and can't be egotistical, i'm going to sit here and wait. >> never shying away from anything, weiss, what would you do with apple? >> i don't own apple. >> you know i'm playing with you. >> i know. i don't own apple, always looking for an opportunity to get in, but there is one legitimate issue, that centers around china mobile, which is playing hardball that we haven't seen in the u.s.
so they've kept the iphone off china mobile and it's the biggest distributor of phones there, biggest teleco company there. if china mobile extracts big concessions to the u.s. providers, then go back and do the same. that's the principal issue. the other thing you're coming to the most important quarter in apple's recent memory and that's because you've had so many product launches coming in this last quarter they've really got to hit the cover off the ball. having said all that i still think apple long-term is a value play here, i still think it's a growth play, so it's just the right time to get in. >> dennis? >> joe brighton brings up the topic of a generational circumstance. going back a generation to me this reminds me of what happened in the early 1970s when you had the wonderful nifty 50 stocks you were supposed to own forever, all of which are wonderful companies -- >> 1970s or 1870s? >> i look like i was from the 1870s but apple is a wonderful
company but not a good stock at this point. you have to be careful here. >> stephanie, what do you do, sitting there at home watching what all of us say as america's best loved stock, most valuable company on earth and watch it fall as far as it's fallen, what do you do? >> it's trading range bound until january 22nd, which is their report date and there are some fundamental questions. that's the shall u. this is an overowned stock to begin with. you've got questions, you got a lot of people owning it and now everyone is running for the doors. i think you want on these big pullbacks to be adding. we trimmed on 584 and was tempted at 505, didn't pull the trigger, on the big declines you have to buy the stock. that said i don't think it will get out of the trading range until you get clarification on the gross margin issue on the cannibalization issue. i want to say one thing, broadcom today raised guidance. apple is a 10% total revenue customer for broadcom and also have samsung and a lot of other great customers but i think that
bodes well for a lot of their products so with that said again trading range until you get more clarity. >> many questions out there over why apple shares performed the way they have over the last few days. here is another one with the seeds of the sell-off, actually sown by a research note from one of wall street's top rated analysts? the reports author joins us live, steve milanovic from ubs, great to see you again. >> thanks for having me. >> it was a couple of days ago you put out a note and i know you like apple and still call it a buy but you issue what is fair to say may be a reality check for what's going on, you cite margins having peaked, multiple expansion being over and needing a new category creation to succeed. >> well i think you've got a real conflict for the stock which is why it may very well be in the trading range for a while. on the one hand the valuation is cheap and you talked about the nifty 50 back in the 1970s. i doubt many of the stocks were ten times with a 30% return on
capitol like apple. on the other hand you have revenue growth slowing, margins may be hitting the secular peak. tech investors don't like that. you're not likely to get much pe expansion from here, that doesn't mean the stock can't go up due to earnings growth. we continue to be bullish. >> you'll hear on "rock center" tonight with brian williams tim cook will say something about television where he calls it a tv is an area of int interest. when you talk about new category creation to try and take apple to that next level, is that the kind of thing you're talking about? >> i think tv is clearly one of those, it's unlikely they'll do a lot on content but in terms of how you manage your device and so forth they'll probably play there, perhaps wearable computers. i'm glad you brought up tim cook. people are talking about steve jobs is no longer there, that's obviously a long-term negative but i don't think they're getting much credit for what they do have. tim cook is a level five leader, someone who is more humble, who is ambitious for the company,
not for himself and as you watch and read the interviews you get that strong sense, so i feel like apple is not getting full credit for what they do have in the absence of steve jobs. >> mickey mantle wasn't joe dimaggio but was still pretty darned good. >> exactly right. >> are apple's best days behind it? >> one of the things we're seeing is in a shift in the shareholder base from growth to value. i talked to growth managers who believe in the story but cut back, realize the stock will be a bit of a grind from here. value investors are looking at it but probably takes them time to do their work. it could very well be in a trading range for a bhiwhile. the stock bounced off its 200-day average but at the end of the day we're maybe in the fourth or fifth inning of the apple story. i don't think it's over and we do think it will rebound next year. >> steve, good to have you on the show, appreciate it so much. >> thank you. >> steve milunovich from ubs.
>> you made a good point before we came on air and what it was i thought about is that we're seeing some notable hedge funds suffer big withdrawals at the end of the year. apple was a key holding for the hedge funds, they're liquidating the decisions and expectations of redemption. if that's the case you want to buy apple. >> there are a million different reasons flying around the street, whether it's a technical sell-off we're seeing, the margin requirement story that we talked yesterday about, any validity to any of that, or is it simply this is a stock that has dominated the action over the course of a year, and people are just taking profits where profits are to be taken. >> i think again a lot of the participation in the stock is short term thinking which is problematic and we'll expand upon that at a later point. again, we talk about the fundamentals of this company and i just don't get it. i know dennis you brought the nifty 50 but if you think about
one metric for apple and that being in the january earnings that are released, if they had 50 million iphones, where is the stock going and it's clearly going much higher and that's clearly evidence that there is sustainability in the earnings growth. >> if the can do that and stabilize margins the stock goes higher. those are the two questions after the last quarter when they beat on the iphone numbers. >> you get news before that and the news you get before is what verizon and big t are doing in terms of iphone and ipad sales. >> you got comments from at&t seemed to be negative for apple. >> they were up marginally. >> that isn't good enough and that's the issue. >> they didn't talk about the mix either. android continues to pick up share. >> come up on "halftime" a game changing deal for netflix, the stock continues to soar on its tie-up with disney. is it enough to lure investors back long-term, two traders, two big opinions and one big debate. yum is popping but should you buy into that rally?
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netflix recent deal with disney is giving the stock quite a boost but is it enough? joe terranova is our bull and stephanie lee is our bear. >> why are we doing bull, ladies first. >> we're going to you. >> the street likes it and i'm sure stephanie does the fundamentals of the company are bad and again it's a case of tell me something that i don't already know about the company. so understanding you've got bad fundamentals, this disney deal in 2016 in my estimation places a put underneath the stock itself. it also places netflix in a
position which now has carl icahn with 10% ownership of having the ability to get sold. i think whether it be a google or a microsoft, whether it be a comcast, i think a deal is far more likely now in this on litration story from netflix is the stock is going to zero those days are over. >> i would just say i can never own a stock because of a takeover, number one but the fundamentals are not very good. that's number two. number three, this disney deal doesn't go into effect until 2016 so -- >> new movies. >> you don't have any growth in subs domestically from this particular transaction. >> absolutely. >> the stock being up 14%, excuse me 12% since they made this announcement is overdone, more of a short squeeze if you will. that said the cost of this we don't know what this transaction is. we're hearing it's 300 to 500 million. >> expensive. >> they've got to do more and that worries me so you got
domestic issues, the company that is still expanding international which margin pressures will continue. >> absolutely. >> the stock is up 64%. >> free cash flow remains negative for multiquarters. we know that story. you said it yourself, short interest is being unwound. now what is the propensity moving forward for shorts to come back on the stock, understanding at some point you have icahn on your side, the disney deal in 2016 in your back pocket, it's an exclusive deal, it's a good deal. >> don't you make yourself -- >> you also have competition. one bad headline from amazon saying they're going to get in aggressively, i think in terms of content i think you have a lot of players that are kind of jockeying for position, if you will, to try and take share from netflix and in this space gain market share in general so that is i think if you get a bad headline i think the shorts will go back into it. >> so reed hastings said we want to be like stars, we want to be like hbo.
we want that same type of deliverability. >> they don't have a balance sheet like the others. >> absolutely not. >> they need to raise capital. >> are they spending so much money they become less desirable because of the money they're spending for content? >> no. >> are you overlooking? >> no and that's a good question, a good point to make and i would say three months ago i probably would have leaned in the direction of saying yes to that. >> does icahn change that much by his presence being in the game? >> icahn did a lot for lions gate, drumming things up and motivating byrnes to do some things. he's doing a lot as well. maybe i'm placing too much on the disney deal but i really believe this disney deal is good. >> i do, too, but it's just i don't think it's going to move the needle in terms of the fundamentals. >> but it gets him potentially closer to the goal line of being acquir acquired. netflix on their own is not doing it. >> i'll make that the last word. weiss who made the more compelling argument here? >> i think stephanie did and
here is the issue. carl icahn, this is the second bite at the apple. follow them to blockbuster, you'd have gone broke because they went belly up. the content costs are the principal consideration and you're in an arms race with much better funded companies such as the cable companies so you're making this essentially a battle that netflix can't win and i don't think you ever own stock just for a take. >> we go to the market flash desk now, pretty active market, mary thompson what do you see? >> we're watching yum brands, scott, up about 1.7%. basically today there was an annual investor meeting and the company's ceo david novak giving guidance on china saying same-store sales there should be in the mid single digits in 2013, this comes after the company's forecast of a 4% drop in china same-store sales fourth quarter. china is the biggest market, company saying it plans to open
more higher margin pizza hut stores in smaller cities where the competition is less and the costs are less as well. >> joe, news like this coming out from the ceo making what are perceived to be fairly positive comments after what were incredibly negative metrics in comments regarding china wouldn't the stock be up more than 1% if the street liked what he was saying? >> i don't think so. i think there's a lot of negativity off the earnings the other day. i bought the stock the other day. you know that, and i left myself a long runway in essence to be incorrect on the purchase. it's not about timing. it's about the thesis and understanding that i think in 2013 yum, which is so tethered to the chinese economy, i think that economy turns around. ultimately i think yum is in an excellent position, they're doing well domestically in the u.s. with taco bell and pizza hut and i think the growth and expansion in china will come back. >> well, a crude reality for oil today, the commodities sliding roughly 2% so how low can black
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welcome back to the halftime show. we start with occinedal petroleum down 0.5%. >> this stock has been hammered on a fundamental basis and it's interesting because the company, they're changing their strategy to focus on high return projects and also reigning in their spending, people were very concerned they were going to spend galore and not be able to initiate or increase their dividend. i like the story down in the low 70s particularly in the valuation and i like what i heard from management. >> dick's sporting goods, add that to the list of special dividend issuers, $2 a share
payable on december the 28th. joe, the stock is getting a little bit of a lift. >> and dks is a favorite name of mine over the last couple of years, a secular trend, all about the footwear, the apparel and it's about the american consumer stepping out, exercising more and using the exercise equipment. this is a stock in my estimation now trading in the low 50s, moves to the upper 50s, it's digesting the negativity surrounding sandy and its geographic location well. they've got the cash in hand to fund this. this is a solid company. >> dennis gould is sitting at 1700, not talking about a special dividend here but is it going to pay dividends to own gold? >> i think owning gold in dollars has been a bad trade for a while. i'm bullish for gold in non-u.s. dollar terms, in yen terms and if you own gold in yen terms over the course of the last two months you are profitable. somebody owns gold in dollar terms is down several points. gold is nothing more than another currency, crossed
against other currencies and there's nothing spectacular about gold, it's just a currency. >> call it a slick slide for oil, crude falling 2% nearing its lowest level in three weeks. for more let's go to jackie deangelis, the host of "futures now." >> crude having a tough day, the question is why. look at this chart dollar strength is causing major pain for oil, our question today is there more to selling than just the dollar rally? let's start talking futures now. rich, beyond the dollar where do you see crude going? >> jackie, the headlines gasoline inventories rose 7 million barrels, that's what's driving the market here. if you took a look at the crude weekly inventories we fell 2 million, that tells us somewhat neutral but the big picture here is that for the most since 2001 we increased our gasoline supplies here that's going to
drop oil. why? in the next week or two as we ratchet down the production of gasoline we'll have excess crude and plus you put in the range effect, $90 for the last three months, level to sell, continues to be and support levels around 84.5, so i think really the highs in probably heading back towards the bottom part of the range right here, right now. >> sounds like that's one piece of the story. anthony grisanti at the nymex, sounds like it's more global economy issues. >> jackie, absolutely. there's a lot helping texas tea to slide today. we have a stronger dollar. number two, the ecb ratcheted down the growth rate for europe. number three which is a big thing, a lot of people haven't followed it, for the first time the department of energy is using brent crude oil as its benchmark for crude oil prices rather than wti. you might see funds start to liquid date the positions if that's not the benchmark that the energy department is going to use.
>> i think both you and rich made valid points but at the same time i want to look at the middle east. we had some developments out of syria, the new continues there. how much is this a middle east premium priced into the crude price at this point, how much is it providing a support? >> jackie i think it's less than what it was three or four weeks ago when you had israel and gaza fighting. when you look at the news today hillary clinton met with the russian foreign minister, syria's biggest ally is russia. if russia tells them you have to calm down they'll calm down. >> you think they're going lower. are you buying or selling oil slide? logon to futuresnow.cnbc.com and vote in our poll, we'll give you the results on our website and while there catch today's show, we have investment guru curtis arlidge of bny mellon and tune in to that and doug cass will
reveal how he's playing apple's wild ride today at 1:00 p.m. futuresnow.cnbc.com. >> see you at the top of the hour on cnbc.com. coming up halftime fund managers doing fancy trading to give portfolios a temporary boost and are you, the investor, left holding the bag? jpmorgan's tom lee on track to hit his 2012 s&p target, we'll ask him what's next for the market own your money when halftime comes back. o
welcome back. will quarter end she nan ganz be hurting your money? some portfolio managers are bidding up stocks the second before a quarter ends, those stocks see temporary pops and the managers can point to bigger quarterly gains. jon najarian joins us live from new york. doc good to see you. some call this window dressing, some marking the close. what do you call it? >> all of us call it cheating although if you're committing the capital to buy the shares and you're holding it up there, i don't know that you're going
to see these guys taken away in cuffs, judge, but i think people that follow the performance based on that end of quarter burst that "the journal" cited and they looked at 35 quarters worth of work so this was not just a flash in the pan, let me select out the data that matches what i want to show. that was a pretty clear pattern over time and i think it's exacerbated by believe it or not hfts, high frequency traders and exchange traded funds, the etfs. both of those would contribute to the swing of volume for people to buy these things and then the hft algorithms would take over. >> part of the problem, dennis, you've got this potential bid up in the stocks in the waning seconds of the quarter, and then absent that, after the fact, the stocks can decline quite fast. >> and they do, that's exactly what has happened. if you read the article today, if you look at the headline of
the "wall street journal" it looks like something terribly nefarious and hedge fund managers are making hundreds of millions of dollars in additional fees, when you read farther into the article the last several paragraphs you're talking about two fund managers who made $4,700 and $2,300 in additional fees. come now, i suspect the s.e.c. has greater things to look into than this, talking about $7,000 of aggregated fees. my guess is they spent sever hundred thousand dollars in s.e.c. time to penalize two funds $75,000 for $7,000 worth of additional fees. >> is anything wrong here? >> it is an issue and i don't think it's isolated to the two fund managers. the point is if you're in a low return environment, you can ratchet up performance in a higher quartile, the other thing is it's not just hedge funds. they're the whipping boy. it's long only funds, they want to get that morningstar fifth star. on the other side of it, i used
to know a guy when he ran a hedge fund he would sell into the markup and buy it back the next day which is great if you're not a taxable fund because he knew it was a hark wrup so this story is as old as lincoln getting shot at ford theater. i don't think there's anything here, it's very difficult to prove. >> of all of the street's top strategists, tom lee could nail the number on where the s&p will close out 2012. his prediction of 14,030 is looking better by the day. tom welcome, good to see you again. >> thanks. >> how does that factor in? i don't know if you heard geithner on our air yesterday with steve liesman but sounded like a guy prepared to go cliff diving. >> i did hear that and you know, that's not very constructive talk because at the end of the day, you know, if we have a recession, the depth of that recession is not known until you're sort of caught in it. you don't know what downturn in the business cycle. it's dangerous to hear about
washington talk the cliff is harmless but i do think the threat of it is so significant and investors are so concerned about it that it does make me think a lot more of the cliff is discounted in current stock prices. >> i'm surprised, tom, in the notes you say you don't think we're going to go off and what would happen to the stock market? stocks and investors have been held hostage by the trading action over the last several weeks. >> that's right. yes, and that's right. so we don't expect us to actually fall off the cliff. our base case and it's something that we spend every week really discussing is that about a third of the cliff is realized, in other words we get about a third of the total impact, two-thirds being deferred and that's already in the gdp forecast, roughly 1% in the first half. that's a scenario that's not going to justify investors being risk off and sitting on the sidelines but the time to recognize that scenario is not going to happen towards the end of the year so i still have this vision of investors being cautious, we get developments and as we get late into december
we get some resolution and the market is going to finish pretty strongly and hopefully investors are positioned on the right side of that. >> what enabled you do you think to get fairly close thus far to the 1430 target that you set out? what do you foresee into next year and where would you have folks play the market now? >> one of the things helping us we've been viewing the market being in a secular bowl since '09 so we're not counting down the days to the end of this bull market. we've been really looking for signs of a recession, you know, to us the thing that really ends bull markets are recessions, not are people too bullish or bearish, and so we're comfortable that what we're going through is a morass because of europe and china, but it's really this durable goods story in the u.s. led by housing that's going to strengthen in 2013. we're confident if you're buying
you don't suddenly think you suddenly have to reverse your views in six months and sell everything. >> tom, business investment was down 2.2% in the latest gdp report, and a lot of that is fiscal cliff tied to that. when do you see business investments starting to pick up, because we all kind of know the housing story, we know consumers kind of hung in. i think actually the next big upside could be a business investment, if it comes back but when does that come, in your opinion? >> it's a tricky question because there's two dynamics when we talk about business investment, it's capital spending which has a huge tech component, but it's also construction activity because it's building out the commercial infrastructure, health care, roads, et cetera, that associate with capital spending itself. companies can be cautious and we know there are multi, multidecade levels of cautiousness given their cash and where spending is and at some point pure replacement has
to take over. that's really what sparked the recovery in housing, we were scrapping so many homes and you had organic growth. i think we're getting to the break point soon. >> tom, let me ask you about a couple of your picks before we run. apple i know you like it, broadcom you won't get much disagreement, starbucks is having a good day. can you give me an outlier pick that may not be in everybody's part foal yo that you like, you have coach, visa, schlumberger or some of the others? >> when you look at the next 12 months, and you treat it as a fifth year of a bull market, the groups that really stand out are basic materials and energy names, so it would be a schlumberger, your metals and mining groups, the ones that are completely out of favor and it does make me wonder if they could have a year that looks like how the financials have been in the past couple quarters. >> tom, good to see you as
always. thanks for coming on. see if you get to that 1430 target. talk to you soon. let's hit the biggest pops and drops, where you want to go, john? let's do this news alert you see at the bottom of your screen, then we'll do pops and drops. look at the dow jones industrial average has now dipped into the red, a modest lost only 3.5 points, caterpillar one of the weaker members of the dow helping to lead it as you can see there on your screen into the red. let's look big movers, lululemon is one of them, that stock is getting a pop. >> before the market got earnings coming out, guidance was a little bit weak. we have to focus on the gross margin which improved dramatically here quarter on quarter. i like the ceo comments. i like the name, trading 70 i think it moves to the mid-70s. >> weiss, what do you see with walter? >> one of the most rumored stocks in terms of being bought. hp is always the name mentioned. eventually one day is happens.
don't buy it on rumors. >> men's wearhouse a drop today. >> shouldn't be that surprising since joseph a. banks disappointed so i think this is a tough space. i don't care if they're getting into the outlets or not. it will take time to work. >> the commodities king will make a big statement about crude oil. denis? >> looks bad, going down, a lot of inventory, crude numbers were down and the size of the gasoline and distillate inventories, we're going lower. >> how low do you think we'll go? >> we're probably going to take a look and see what $65 to $70 crude oil looks like last year and that will not mean recession. it means great production. look at what's going on, setting new 15-year records for the production of crude in the united states and higher next year. >> and a pop for pot, the new marijuana laws take effect today, the law hashed out last month, get it, ha, ha, says it's no longer illegal to possess up
to an ounce of cannabis, although the law forbids smoking in public crowds gathered at the space needle to toke up this morning. the phrase the dude abides take it inside is floating around the web. haven't heard that one. >> i don't know what that means. coming up on "halftime" is washington prepared to take us over the cliff? we're live to lay out the odds of a deal actually getting done and it's hard to sell the winners and buy the losers. our traders tell you exactly how to play two stocks hitting new highs and new lows. "hold 'em or fold 'em" coming up next. tdd#: 1-800-345-2550 let's talk about low-cost investing.
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cook and we'll discuss if this is a pr stunt. rivalry research in motion offering training classes and promotions ahead of its blackberry smartphone or desperate move and what do average americans want to see in a fiscal cliff solution. exclusive results of our cnbc all-america economic survey. back to scott and the "fast money halftime report." see you in a few. on the cliff, top lawmakers speaking on the hill this hour about that very topic, eamo eamon javers is in d.c. with the latest on the negotiations. >> well we've heard from just about everybody in town except for speaker boehner. scott it feels like we're getting some deal making behind the scenes and i'll tell you why it feels that way. we were told that yesterday speaker boehner and president obama held a phone call, it was said to be about 20, 28 minutes in length but neither side has leaked what happened on that
phone call. the house republicans are not leaking, the white house just within the past hour said it's not going to tell reporters what was discussed, that's probably an encouraging sign that negotiations are taking place. last week we saw that they had a proposal and immediately house republicans leaked the white house proposal and then republicans went out of their way to say they were laughing at that proposal, now they're not leaking, that's probably a sign of some real deal making but nonetheless harry reid the senate democratic leader was on the floor within the past hour or so and he kept the pressure up on republicans. take a listen. >> the plan for the republicans to face reality, there's enough writing on the wall. >> you get the sense here guys that democrats feel like they have the upper hand, there is some dealmaking behind the scenes. what that dealmaking is we don't yet know and when it could yield some resolution we don't know that. >> quickly, we got from geithner yesterday to steve liesman he's prepared to go over the cliff if need be. >> yes. >> do we know if the republican
position is weakening at all, are they ready to make any concessions on their end? >> well we get a sense that some republicans that i've been talking to are ready to make a deal, i talked to a couple republicans in the house yesterday who said they are urging speaker boehner to cut a deal here to agree with the president to extend the bush tax cuts for all those under 250,000, at least do that much, so there is some weakening on the republican side. the question is whether there's enough to get a deal or whether there's any weakening at all on the democratic side on the big entitlement and spending cuts we have to see as part of this package. >> eamon thanks. >> you bet. u.s. dollar index is strengthening ahead of tomorrow's big jobs report. will the data push the currency higher. todd, what are you expecting the dollar to do? >> i think we're in a risk off market here. worries about the fiscal cliff, is going to drive u.s. dollar higher. i think the ecb trichet is
worrisome. of course you have to pair it against another currency, the australian dollar. the rba is cut about 175 basis points over the last year so australia is really kind of begging to be sold. technically speaking it's in this long-term consolidation i'm sure dennis is watching, fx traders like me are dying to sell this long-term consolidation up around the 1.05 level. i'd love to get short aussie in nfp. >> give me your level and we'll debt dennis' reaction. >> short at 1.0525 and put a stop off on 1.0625 and about 1.03 we can ring the register. >> denis? >> i've got the other side of trade, i'm long of the dollar against the japanese yen, it's been working and i'll continue to do it. if it takes out 1.0525.
who doesn't know this? sometimes it is tough to buy the losers and sell the winners. let's play a little "hold 'em fold 'em." first up, bank of america continues to climb, up almost 80% this year. last check it was holding above 10. >> to me it is never where stocks have come from, it is where they are going to. you base that on valuation and what you can reasonably forecast. i still think at a discount to back value where this is, it is cheap stock. moynihan has stayed low profile but he's done the right things. i own the stock, would still hold it for sure. >> freeport mcmoran, 23% falling in the last year. this was obviously the subject of a deal. >> i think you have to let the dust settle a little bit first. but at 30, it's very interesting. it is yielding 4%.
this deal does diversify them away from copper. i know pms just wanted to own this just for copper but they have a good history of m&a. i know debt levels go up but they have a good track record of paying that down. i think this deal by the end of 2013 could yield 13 billion ebi ebita. if you have a longer term time horizon, you collect the yield and wait and see how this thing progresses. >> i would absolutely agree. i tweeted out yesterday the reaction to the deal, i thought it was a buy at 32.5. rethin it reading some of the reports. goldman sachs puts a report out today saying it places it in the penalty box which i have a problem with because we use that term here on "fast money," though some don't like it. but i think it is going to be in the penalty box for some time. i agree with stephanie, you have to have a much longer term view of the markets than freeport itself. this is not something you'll buy today and flip it in a month or
two. >> our traders are quick but they're not always right. listen to what our own steve weiss said about consol energy. >> i like the mixture of gas, nat gas and also coal. i think that's still a very attractive name to play an much less tied to the cold cycle than some of the other companies. >> well, those shares have lost some energy since then. about 6%. getting a little bit of a bounce today as you can see. yesterday, weiss, that's going through your mind? i see that rye smile on your face? >> i should have called in sick today. here's the deal. i was there early on, i was wrong. down 6% is not bad but there is a lot worse just a couple weeks ago when it was down 12% from where i bought it. so it's recovering. >> you like it? >> i do like it. i own it still.
i have shaved part of my position but i still own most of it. i went wrong thinking nat gas would help it more than it did. nat gas is only 20% of the company. other 80% is coal and i hate coal so i shouldn't have done it. i think the news in nat gas today is good news in potentially opening up for sale lng. let's see what seema mody's working on? >> tons of special dividends being made before the fiscal cliff deadline. they are all the talk of twitter. the big question -- is it too late to buy in on a stock once the announcement's been made? tweet us your thoughts at cnbc "fast money" and we will unveil at 5:00 p.m. what's next?
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